9. Commitments and Contingencies

Restructuring

During the first quarter 2016, the Company exited from its Colorado office in order to consolidate facility space and reduced headcount in its RF Solutions segment related to both operations for services and engineering for products. The restructuring liability at March 31, 2017 included the remaining obligations under the lease, net of an assumption for proceeds for a sublease. The Company expects to sublease the office space in the second quarter 2017. Of the $0.2 million restructuring liability at March 31, 2017 and December 31, 2016, $0.1 million was included in accrued liabilities and $0.1 million was included in long-term liabilities in the consolidated balance sheets.

The following table summarizes the restructuring activity during the three months ended March 31, 2017 and the status of the reserves at March 31, 2017:

	December 31, 2016		Restructuring Expenses			Cash Payments/ Adjustments			March 31, 2017

Severance and related employee benefits	$	6	$	(1	)	$	(5	)	$	0
Lease terminations		190		10			(37	)		163
Total	$	196	$	9		$	(42	)	$	163
.

Operating Leases

The Company has operating leases for facilities through 2020 and office equipment through 2019. The future minimum rental payments under these leases at March 31, 2017, are as follows:

Year	Amount
2017	$	843
2018		1,030
2019		945
2020		362
Thereafter		28
Future minimum lease payments	$	3,208

The rent expense under leases was approximately $0.2 million and $0.3 million for the three months ended March 31, 2017, and 2016, respectively.

During the first quarter 2016, the Company exited from its Colorado office in order to consolidate facility space related to its engineering services business. The lease expires on October 31, 2020 and the remaining lease obligation as of March 31, 2017 was $0.4 million. The Company expects to sublease this property during the second quarter 2017. See discussion related to the Colorado office in the restructuring section of this footnote.

In June 2016, the Company entered into a new four-year lease for its Beijing Design Center and in January 2017 the Company signed a new lease for additional space at the same location. With the expansion, the Company has 11,270 square feet in its Beijing Design Center. The total lease obligation pursuant to agreement for the expansion was $0.4 million. The Beijing Design Center has an engineering department for antenna development as well as sales and marketing for the China market.

Capital Leases

The Company has capital leases for office and manufacturing equipment. The net book values for assets under capital leases were as follows:

	March 31, 2017			December 31, 2016
Cost	$	453		$	324
Accumulated Depreciation		(126	)		(105	)
Net Book Value	$	327		$	219

The following table presents future minimum lease payments under capital leases together with the present value of the net minimum lease payments due in each year:

Year	Amount

2017	$	78
2018		104
2019		87
2020		47
Thereafter		47
Total minimum payments required:		363
Less amount representing interest:		27
Present value of net minimum lease payments:	$	336

Warranty Reserve and Sales Returns

The Company allows its major distributors and certain other customers to return unused product under specified terms and conditions. The Company accrues for product returns based on historical sales and return trends. The Company’s allowance for product returns was $0.2 million at March 31, 2017 and December 31, 2016, respectively, and is included within accounts receivable on the accompanying condensed consolidated balance sheet.

The Company offers repair and replacement warranties of up to five years for certain antenna products and scanning receiver products. The Company’s warranty reserve is based on historical sales and costs of repair and replacement trends. The warranty reserve was $0.4 million at March 31, 2017 and December 31, 2016, respectively, and is included in other accrued liabilities in the accompanying condensed consolidated balance sheets.

	Three Months Ended March 31,
	2017			2016
Beginning balance	$	394		$	348
Provisions for warranties		52			33
Consumption of reserves		(26	)		(55	)
Ending balance	$	420		$	326